On Wednesday, Intel disclosed that its acceptance of $7.86 billion in U.S. government subsidies entails certain restrictions on the company's ability to divest interests in its chipmaking division should it operate autonomously.
The U.S. Commerce Department unveiled the subsidy to Intel on Tuesday as part of a broader $39 billion initiative designed to enhance semiconductor manufacturing within the United States, benefiting companies such as Taiwan Semiconductor Manufacturing Co. (TSM) and others.
In September, Intel's CEO, Pat Gelsinger, announced the company's intention to establish its chip manufacturing operations as a subsidiary, seeking external investors for the unit known as Intel Foundry.
In a recent filing with the Securities and Exchange Commission, Intel revealed that certain subsidies require the company to maintain a controlling stake of at least 50.1% in Intel Foundry if it is spun off as a separate privately held entity. In the event that Intel Foundry transitions to a publicly traded company and Intel is not the majority shareholder, the company would be restricted to selling only 35% of Intel Foundry to any single investor without triggering change-in-control provisions.
Intel has not yet responded to inquiries regarding these disclosures. A Commerce Department representative stated that the government is currently negotiating change-in-control provisions with all direct grant recipients.
To proceed with its $90 billion investment projects in Arizona, New Mexico, Ohio, and Oregon, and to continue producing advanced chips in the U.S., Intel must comply with these restrictions, as noted in the filing. Any changes in control may require Intel to seek approval from the U.S. Department of Commerce, according to the document.